ATG 2006.3 with MySQL 5.x on Linux

Has anyone had any luck installing ATG 2006.3 on MySQL 5.x?  Currently, my environment is Linux on intel (actually, OSX 1.4.7).  I'm having trouble running the ATG_HOME/DAS/sql/install/mysql/das_ddl.sql script, it fails with the following error:

ERROR 1071 (42000) at line 284: Specified key was too long; max key length is
1000 bytes

My characterset seems correct - latin1 as follows:

| character_set_client     | latin1                                                              |
| character_set_connection | latin1                                                              |
| character_set_database   | latin1                                                              |
| character_set_filesystem | binary                                                              |
| character_set_results    | latin1                                                              |
| character_set_server     | latin1                                                              |
| character_set_system     | utf8

I'm wondering if the character_set_system should be latin1 aswell, but I can't be sure.

I can reduce the key sizes, but this might adversely affect ATG.

Thoughts, comments, updates?